Rinky, you are a good hearted person.
Is this an isolated incident or is he breeding on a regular basis? Is he breeding staffies and selling them for fighting? You might want to call the ASPCA and talk to them about the whole situation and tell them as much as you know. Ask them what the legal requirements are in your area regarding breeding and kennels. Some townships require a person to have a license if they breed more than twice a year. Some require a kennel license if a person has more than 4 dogs. If this is just a one time thing for him, I don't know if there is anything that the ASPCA can do about it. But, if you can give them as much information as you know about the guy, they might be able to find a legal reason to pay him a visit.
If nothing comes out of all this, you should warn him that if he sells these puppies and doesn't disclose that they may be a result of a brother/sister breeding, he could get get sued by a buyer later on down the road if there if a problem develops.
I commend you on all of your efforts. I wish there were more caring people like you in this world.